What we’re reading (10/14)
“Fed’s Powell Suggests Tightening Program Could End Soon, Opens Door To Rate Cuts” (CNBC). “Federal Reserve Chair Jerome Powell on Tuesday suggested the central bank is nearing a point where it will stop reducing the size of its bond holdings, and provided a few hints that more interest rate cuts are in the cards. Speaking to the National Association for Business Economics conference in Philadelphia, Powell provided a dissertation on where the Fed stands with ‘quantitative tightening,’ or the effort to reduce the more than $6 trillion of securities it holds on its balance sheet. While he provided no specific date of when the program will cease, he said there are indications the Fed is nearing its goal of ‘ample’ reserves available for banks.”
“Wall Street Is Firing on All Cylinders, Fueled By Deals And Trading” (Wall Street Journal). “Goldman is now on pace for its best year ever in its main investment-banking and markets division. JPMorgan is on track to make over $50 billion in annual profit for the second year in a row. BlackRock is sitting on a record $13.5 trillion in assets under management. The strength is evident across many of the banks’ businesses, reflecting the enthusiasm in the stock market and corporate boardrooms. Record high stock markets fueled increased trading and borrowing by hedge funds and others to buy even more securities. President Trump’s policymaking is adding volatility that keeps traders eager to move, but not so much to spoil the punch.”
“This Gold Rush Is Ominous” (The Atlantic). “The mystery of the current gold rally is that the S&P 500 is also up. The stock-market index reached an all-time high earlier this month, which would seem to suggest that the American economy isn’t quite as close to the brink as the price of gold might indicate. But the reality probably has to do with a bifurcated market. Joe Davis, Vanguard’s global chief economist, told The New York Times on Saturday that this rare case of gold and stocks moving in a parallel upward trend has to do with ‘dramatically different’ investor perspectives: The optimists are going with equities, and the pessimists are going with gold. In today’s economy, there’s room enough for both.”
“‘Absolutely’ A Market Bubble: Wall Street Sounds The Alarm On AI-Driven Boom As Investors Go All In” (Yahoo! Finance). “Bank of America’s latest Global Fund Manager Survey, released Tuesday, cited an ‘AI equity bubble’ as the top global tail risk for the first time in its history. The survey, which polls roughly 200 fund managers overseeing nearly $500 billion in assets, also showed cash levels falling to 3.8%, near BofA’s ‘sell’ threshold of 3.7%. Historically, readings below 4% have marked periods of peak risk appetite, often surfacing late in the market cycle.”
“Salesforce CEO Marc Benioff: Agentic AI Is The Next ‘Revolution’” (Yahoo! Finance). “Benioff framed agentic AI not just as a productivity tool, but as a force that could democratize opportunity across industries. Unlike predictive AI, which analyzes historical trends, agentic systems can act autonomously within organizational workflows, ultimately generating insights, automating tasks, and driving decision making in real time. ‘There's no question it is here,’ he said. ‘You're going to see it over and over again.’”
